Crude MOC: Sour complex regains strength amid widening EFS

Benchmark cash Dubai's premium against Dubai futures strengthened June 28 while Brent/Dubai Exchange of Futures for Swaps surged to a fresh high.

S&P Global Platts assessed August cash Dubai at a premium of $2.07/b to the same-month Dubai futures at the 4:30 pm Singapore close on June 28, up 35 cents/b from the previous day.

August cash Oman was pegged at a premium of $2.12/b to same-month Dubai futures at the Singapore close, up 40 cents/b from the previous day.

At the Asian close, Brent/Dubai EFS was assessed at $4.13/b, the highest since it reached $4.16/b on September 17, 2019, according to Platts data.

The Brent/Dubai EFS is a key indicator of the spread between light sweet and heavy sour crudes, and a wider EFS makes crude priced against Dubai more economically attractive for Asian refiners compared to Brent-linked ones.

With spot trading activity in the sour crude market slowing down as the trading cycle for August-loading barrels nears its end, market participants are shifting focus to the upcoming OPEC+ meeting on July 1 for indications on supply-side fundamentals moving forward.

"While market consensus seems to be of a 500,000 b/d increase in production for August by OPEC, they are known to surprise the market. Even a 1 million b/d increase may be possible as Iran [nuclear deal] news is not so positive and inventory levels are dropping everywhere," said a crude oil trader with a South Asian refinery.

The Platts Market on Close assessment process saw four August Dubai partials of 25,000 barrels traded.

The Dubai partials were all traded with Unipec on the sell side and PetroChina on the buy side.